The world's biggest steelmaker, ArcelorMittal, is slashing the value of its European business by about $4.3bn (£2.6bn) after the eurozone's economic woes hit demand.

ArcelorMittal said steel demand has fallen by about 8 per cent in Europe this year, adding to the problems the industry is already facing from long-term, excess-production capacity.

This year's decline in demand brings the cumulative fall in steel consumption to about 29 per cent since 2007. The company said the non-cash charge would be taken in the fourth quarter and would affect its net profit, which it will report on 6 February.

The announcement comes after the group disclosed a net loss of $709m last month and identified cutting its massive debt, which hit $23.2bn at the end of September, as a priority. ArcelorMittal also proposed last month slashing investor payouts by nearly three quarters next year in a move that will see Lakshmi Mittal, the chief executive and 41 per cent shareholder, lose dividends worth $350m.